CPS says budget outlook 'serious,' hints at tax hike

Chicago Public Schools leaders said this afternoon the district faces a $475 million budget shortfall next year and hinted that property taxes are likely to rise to make up some of the difference.

The budgetary bad news, officials said, is the result of $145 million in rising teacher salaries, $130 million more required for employee pension costs, $35 million in extra borrowing costs and a $30 million increase for health care costs and other benefits.

The district also has another $100 million hole after a one-time raid of its reserves last year to avoid a property tax increase.

"It's very real and very serious," recently reinstalled Chicago Board of Education President Michael Scott said at a news conference.

Officials would not specify all the steps to offset the deficit. They called on the state to provide more money, as the district does every year. Scott hinted that local property taxes will have to be raised, which the district has done frequently in the past decade with the exception of last year.

The district estimates the federal stimulus package will bring in $190 million, but only $50 million of that total could be used to balance next year's budget.

The news conference came after the district's new CEO Ron Huberman told aldermen last month that declining tax revenue and rising employee pension requirements will create a "perfect storm" that will make balancing the budget difficult in coming years.

"It will most likely be the largest deficit in our history," Huberman said at the time.